Aging Baby Boomers Slow US Growth

The US economy is recovering, but not as quickly as expected. The reason may be simple demographics. Baby boomers. A boom in babies boomed the economy. Subsequent generations didn’t have as many babies. Now, a large portion of the US population is retiring. They aren’t spending as much as when they had families and careers. The next generations are smaller and having small families (partly because they can’t afford big ones and may not want to over-populate the planet). The result is less consumption, less growth, lower interest rates, and a slower economy. This is similar to what happened in Japan decades ago, and they have yet to recover.

“these demographic changes account for a 1.25 percentage point decline in annualized economic growth since 1980” – World Economic Forum

The aspect that few speak about directly is that this trend ends with the end of the generation. No generation has lived forever – so far. It may just take that much time and that many deaths to get past this influence.